57 SMEs put out of business following CSC-Boustead Beef power cut


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More than 50 small and medium enterprises that are renting space from the old premises of the Cold Storage Company were put out of business from last week when the Zimbabwe Electricity Supply Authority cut off power at the Bulawayo abattoir following the failure by CSC-Boustead Beef to pay its power bill.

The 57 SMEs have been paying their rent to Boustead Beef since it took over the running of the Bulawayo plant in 2019.

Power to the Bulawayo abattoir was cut off on Monday last week and has not been restored yet.

It is believed that CSC-Boustead Beef owes ZESA more than $20 million.

Boustead Beef entered into an agreement with the government to revive the CSC in 2019 and was supposed to invest US$130 million in five years.

It was supposed to pay rental of US$100 000 a year but instead started collecting rent from all tenants at CSC premises.

Rent paid by the old CSC tenants was one of the major sources of revenue for Boustead Beef and was one of the main reasons why Boustead Beef fought for control of the Bulawayo plant with the corporate rescuer, Vonani Majoko.

The CSC was placed under corporate rescue in December 2020 after the government realised that Boustead Beef had failed to fulfil its part of the agreement.

Majoko, who was removed as corporate rescuer in July last year,  said one of the reasons why he was not able to do much as a corporate rescuer was that he collected only 30% of the rentals from 1 November 2021 while Boustead Beef took 70%.

 

(116 VIEWS)

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Charles Rukuni
The Insider is a political and business bulletin about Zimbabwe, edited by Charles Rukuni. Founded in 1990, it was a printed 12-page subscription only newsletter until 2003 when Zimbabwe's hyper-inflation made it impossible to continue printing.

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